Pre-Paid Legal Services Inc. (PPD) sought to undo some of the damage done by its disclosure Thursday that it got a draft complaint from the Federal Trade Commission, saying on Friday it believes the move is merely "the next step in an ongoing process."

Shares slumped 19% Thursday after the developer, underwriter and marketer of legal service said it got the complaint related to its identity theft shield and affirmative defense response system.

But Pre-Paid Legal on Friday sought to "clarify" the prior day's announcement, saying it believes the draft complaint is just "the next step" in a process that began in March 2007 and "has been the subject of prior releases and disclosures in previous public filings."

The draft complaint "narrowly focuses" on the company's marketing of the affirmative defense response system, which provides businesses and their employees with a way to reduce the risk of identity theft, and specific issues regarding identity theft and data privacy issues. Pre-Paid Legal said Friday that injunctive relief proposed by the FTC only pertains to affirmative defense.

Shares rose 5.2% premarket to $35.00. The stock through Thursday was down 11% this year.

-By Nathan Becker, Dow Jones Newswires; 212-416-2855; nathan.becker@dowjones.com;

 
 
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